The insurance works in such a way that after the declaration of dependence on care or loss of self-sufficiency, the insurance company starts paying the insured person a monthly annuity, until the end of his life. The insurance benefit is paid regardless of whether the person lives at home or in a care facility.
From the beginning of May, Kooperativa started offering self-sufficiency insurance. “Even before admitting dependence on care, our care guide will help the client and help him with the solution of the situation – submitting applications, orienting himself in other contributions and other social care issues, possibly helping him find professional care,” said Kooperativa spokesperson Milan Káňa.
“Before the labor office decides on the right to a benefit, we can also pay him a so-called preliminary payment, which is the same as the payment for II. degree of dependence,” he added.
Ministers promised better care for the elderly and sick. The new type of service will be available from January
Homemade
The client can take out FLEXI self-sufficiency insurance from Kooperativa at the latest at the age of 70 with a lifetime duration. “The monthly payment is derived from the agreed insurance amount and the degree of dependency granted to the client, the preliminary payment is the same as the payment for II. degree of dependence and we pay it for a maximum of 12 months – until the degree of dependence is recognized by the state. In the case of permanent conditions, the monthly payment is paid for life, its amount may change according to the client’s condition,” informed Káňa. He added that the insurance amount can be negotiated in the amount of 5,000 to 50,000 CZK.
However, some insurance companies have limited parameters, for example, they only pay benefits from the third or fourth degree of insufficiency, or they limit the period for which the insurance is arranged.
Setting the amount of the contribution depends on the client, he chooses the amount of care provided himself when negotiating the contract. Part of the insurance premium will then be able to be claimed as part of tax deductions.
By the age of eighty, one in four will become self-sufficient
According to Káni, there are several reasons why self-sufficiency insurance can pay off. He drew attention to the fact that last year in the Czech Republic there were over 361,000 people dependent on someone else’s help for health reasons, and over seventy percent of them were people over 65 years of age. “Every fourth person becomes dependent on assistance by the age of eighty, every third person by the age of 85,” Káňa pointed out.
At the same time, the average life expectancy is increasing. While in 1975 it was 74 years for women and 67 years for men in the Czech Republic, now it is 83 years for women, or 77 years for men. Along with this, the average time a person will spend in retirement is also increasing. The new tax relief for self-sufficiency insurance is the legislators’ reaction mainly to the fact that the increase in the number of people of retirement age means greater demands on the state social welfare system.
The fact that people are interested in long-term care insurance is also confirmed by Michal Korejs, product director of NN Životní pojišťovna, which has been offering it for several years. “The interest of clients rose sharply after the introduction of tax incentives. “Additional long-term care insurance with lifetime annuity and tax benefits was negotiated on more than a thousand contracts from the beginning of February to the end of April,” he said, adding that the average premium would fit within CZK 400 per month.
Korejs considers the introduction of tax support this year to be an important impulse. “Definitely, this insurance has the potential to become a basic building block for retirement security,” he added.
The Simplea insurance company plans to start offering long-term care insurance for its clients from June. “This service has considerable potential with regard to the aging of the Czech population. For that reason, Simplea and its business partner will also participate in the construction of entire nursing homes,” said the director of the insurance company, Martin Švec.
Generali Česká pojišťovna and Allianz want to offer tax-deductible long-term care insurance in the second half of the year. “We see significant potential for this product, which will increase as the experience of self-sufficiency grows in society,” said Allianz spokeswoman Marie Petrovová.
Uniqa wants to introduce a similar product in the summer. Additional self-sufficiency insurance was offered by some insurance companies earlier.
According to a recent survey by the Czech Association of Insurance Companies, 71 percent of Czechs cite lack of self-sufficiency as their greatest fear. Surveys also show that people prefer to spend the end of their lives at home rather than in nursing homes. Fulfilling this wish, however, requires intensive involvement of loved ones or high expenses for home care.
Long-term care insurance is now tax deductible
Finance
